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Pomerance: Moving forward on transportation funding

By Steve Pomerance

Posted:
12/23/2012 01:00:00 AM MST

To better understand how the city of Boulder should fund our transportation budget shortfall, it's helpful to look at how we pay for water here in Colorado. Water systems are funded through tap fees paid by new development, and user fees (water rates) paid by all system users. Tap fees pay for water rights, reservoirs, treatment plants, etc. needed to serve new development to prevent lowering of the level of service (LOS). Water rates pay for the electricity, chemicals, personnel, etc. needed to deliver water. Water rates can also correct for the inevitable inaccuracies in tap fees, which are set based on expected use rather than actual consumption. We accept paying for our own water, and indirectly paying for the water that we use at restaurants, golf courses, etc., because we understand that these fees pay for the costs of a limited commodity in a reasonable and equitable way.

We treat public transportation facilities in a completely different manner. Only about 20-25 percent of public transportation costs (roads, buses, etc.) are paid for by "user fees" in any form; the rest come from general taxes. Many private costs are not paid for on a per-use basis - depreciation, insurance, etc. The result is that driving is subsidized and the transportation system overused.

Worse, the impact of new development's transportation demand is generally borne by existing residents and businesses, either through increased general taxes or through deterioration of LOS. This is a direct subsidy to development, and again produces excessive use. And Boulder has huge remaining development potential -- around 60,000 more jobs and many thousands of new residents.

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Boulder's traffic levels in many places are now close enough to roadway capacity that relatively small increases in traffic could result in large increases in congestion. Congestion costs us time, and money -- the fire department will have to build new stations and add personnel to maintain response times. And more traffic means more greenhouse gas emissions.

We need to charge for transportation more like water, so that the pricing of both the "tap fee" and the "user fees" provide both adequate funding and useful incentives. Gas taxes, vehicle-mileage fees, tolls, etc. are either impractical or illegal for a city to do on its own, but one "user fee" approach that can be implemented is parking fees. Parking fees are not perfect -- they do not reflect mileage, for example. But at least they provide a way to directly price actual usage of the system.

Parking fees can cover road maintenance costs, and help pay for transit because transit helps relieve the congestion that cars create. The city could add in a greenhouse gas (GHG) fee and use it to buy carbon offsets. Also, the city could charge a congestion fee (based on the difference between actual and optimal uncongested travel time) that could be paid back to the public by reducing the current transportation sales tax.

Private lots that refused to impose a per-car direct parking charge could be charged on a per space basis, which would be higher because of the increased congestion resulting from the free parking. The owner would then have an incentive to charge directly, as well as to avoid building unnecessary spaces.

The analogue to the water "tap fee" is an impact fee. But under Colorado's 2001 state law, impact fees can only be used for capital facilities. This won't work for Boulder because we want to use transit, etc. to handle increased demands, and most alternative modes are operating, not capital, intensive.

Fort Collins' innovative approach is based on the legal principle that a city can limit development to that for which it can provide "adequate public facilities." Boulder's Transportation Master Plan provides two potential "adequacy" standards: no more than 20 percent of signalized intersections below LOS D, and no increase in vehicle-miles-traveled (VMT). Combining the two standards would essentially require new development to "offset" new VMT generated by reducing VMT in other locations, e.g. by investing in Eco Passes, subsidizing vanpools, etc.

Instead of pursuing these reasonable approaches, the city is moving to implement a "Transportation Maintenance Fee" based on standardized trip generation projections that bear no necessary relationship to actual usage. This completely eliminates any incentive effect, fails to deal with the impacts of new development, and ensures that we will continue to subsidize overuse of the automobile into the indefinite future.

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